Leisure consumers continue to cut back on spending

Eating and drinking out, in-home leisure and culture and entertainment see biggest fall since Q3 2016;

Millennial consumers are feeling the pinch more than any other age group.

Consumers continued to cut back on their leisure spending in the third quarter of 2017, according to the latest findings from the Leisure Consumer Q3 2017 report by Deloitte. The quarterly survey of 3,000 UK adults found that almost every leisure category has seen a decline in spending since Q3 2016, indicating that consumers are more cautious compared to last year.

The sub-sectors that have seen the largest year-on-year decline include eating out (down eight percentage points), culture and entertainment and in home leisure (both down six percentage points), and drinking out in pubs, cafes and restaurants (down five percentage points).

Holiday spending has also seen a decline in the last year, with spending on short breaks (four nights or less) having fallen by three percentage points, with longer breaks down by two percentage points since Q3 2016. Spending on attending live sports events remained flat year-on-year, and was the only leisure category not to see a fall in spending.

Simon Oaten, partner for hospitality and leisure at Deloitte, comments: “The combination of rising inflation and lower wage growth is stretching disposable incomes and causing consumers to rethink their expenditure. It is no surprise that we are seeing UK consumers tightening their belts.”

Squeeze on spending ahead of the New Year
Spending intentions for the next three months have also seen a year-on-year decline across the majority of leisure categories. In particular, eating and drinking out has seen spending intentions fall by four percentage points, while spending on culture and entertainment, including museums, theatre and cinema trips, is expected to fall by five percentage points in the next three months, despite encompassing the busy half term and Christmas period for the sector.

Oaten adds: “Significantly, consumers are becoming savvier and are making deliberate choices about their spending. They are identifying habitual leisure activities, such as buying a daily coffee or dining out at a restaurant, and are making more conscious efforts to reduce spending, perhaps by buying a coffee every other day, or by making cheaper menu selections.”

Millennials feeling the pinch but generation gap narrows
According to the Leisure Consumer Q3 2017 report, younger consumers – those aged 18-34– appear to be feeling the effects of rising inflation and lower disposable income more than any other age group.

As a result, millennials are planning to spend less across the majority of leisure categories over the next three months compared to spending intentions at the same time last year, including eating out (down seven percentage points) and culture and entertainment (down six percentage points). On a quarterly basis, expected spending has risen for more discretionary activities, such as holiday breaks (up three percentage points) and attending live sport events (up four percentage points), indicating that younger consumers are shifting their spending in order to pay for ‘must do’ leisure activities.

By contrast, it appears that those aged 55 and older have been less affected by cost pressures, but they intend to cut back on future leisure spending across a number of categories including habitual spending and, significantly, holidays.

Oaten concludes: “The well documented combination of rising inflation and minimal real wage growth has certainly impacted younger leisure consumers more than any other age group. As a result, millennials are reprioritising their leisure spending towards big ticket items, such as holidays and live sports. However, the fact that older consumers are no longer able to protect their leisure spending is a sign of a tipping point. It is likely that bars, restaurants and cafes will be feeling the effects of consumers’ self-imposed austerity measures.”

End

Notes to editors

About the research
Deloitte’s Leisure Consumer Q3 2017 research aims to provide a view point on the key drivers of the UK leisure market, how consumer behaviour is changing and the impact the growth of the leisure sector is having on the broader economy. Spending figures are based on a consumer survey carried out by independent market research agency, YouGov, on Deloitte’s behalf. This survey was conducted online with a nationally representative sample of over 3,000 UK adults aged 18+ between 15 and 16 September 2017.

About Deloitte
In this press release references to “Deloitte” are references to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”) a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see deloitte.com/about for a detailed description of the legal structure of DTTL and its member firms.

Deloitte LLP is a subsidiary of Deloitte NWE LLP, which is a member firm of DTTL, and is among the UK's leading professional services firms.

The information contained in this press release is correct at the time of going to press.

For more information, please visit www.deloitte.co.uk. For more information, please visit www.deloitte.co.uk.

Deloitte LLP is the United Kingdom affiliate of Deloitte NWE LLP, a member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. Please see About Deloitte to learn more about our global network of member firms.

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